Regulating Workers' "Human Rights" Harms Employment

March 4, 2013

In a free market, most actors respond to uncertainty with hesitance. Just as the marketplace drags from uncertainties in macroeconomic tax and interest rate policy, so too do labor markets react to uncertainty about the privileges the government mandates employers must provide. Mandating such privileges as maternity leave and paid sick leave in the name of eliminating labor market discrimination will only kill jobs and stifle economic growth, says Richard Epstein, a senior fellow at the Hoover Institution.

Proponents claim that the United States has failed to enact meaningful protections that allow workers to accommodate the demands of work and family.

This failure is out of step with countries around the world and with international human rights standards.

While many employers do offer workers protections -- like child care benefits, flex time, work from home or split positions -- allowing the government to decide which benefits should be offered would not align with business interests.

By not mandating benefits packages like many other countries, the United States has been able to avoid the extreme unemployment rates that some countries have experienced.

Employers who are forced to offer such benefits are likely to lower wages or refuse to expand the labor force.

Some advocate for mandatory paid-sick leave while more than 40 percent of private workers do not receive this benefit.

Other human rights advocates point out that United States is alone among developed countries in denying paid maternity leave to mothers.

Another recent trend in several states has been to pass laws forbidding employers from discriminating against job seekers who are currently unemployed. Laws such as these, and new versions circulating in Congress, do not increase the number of jobs available.

These laws and proposals place increased restrictions and regulatory oversight on employers who must now incur compliance costs.

The United States must balance whether it wants fewer jobs with richer benefits or more jobs with benefits that employers decided were appropriate.

Without deregulation in the labor market, stagnation and drift will dominate the economic landscape.